Date archives
July 2016

The UFC renewed their contract with BT Sport. BT Sport has been the exclusive provider of UFC content in the United Kingdom and Ireland. Content is king and the UFC creates a lot of it. BT Sport will broadcast at least 150 hours of programming. Above is a video that BT Sport has produced in the past. BT Sport says that the current deal has been a, “hugely successful partnership.”

Holly Holm is a former UFC bantamweight champion but most sports fans know her as the woman who beat Ronda Rousey. Holm lost her first title defense to Miesha Tate and her loss to Valentina Shevchenko has her looking at a losing streak. However, Holm drove the UFC on FOX to the highest ratings in company history.

According to MMA Fighting, the last three rounds of Holm’s fight against Shevchenko drew 4.687 million viewers. That number is good for the fifth-best UFC on FOX event but is the highest rated UFC on FOX rating during the summer months.

The New York Office of the Inspector General has concluded an investigation into the New York Athletic Commission (NYAC). The investigation has found the commission to be an “organizational mess” that is lacking procedures and contains many conflicts of interests.

The Hollywood Reporter did a feature on Ari Emanuel and Patrick Whitesell, the co-founders of the William-Morris Endeavor (WME). In the feature Emanuel and Whitesell discuss the IMG acquisition, the possibility of going public, battling against others in the industry who believe they are over-extended, the WME-IMG content and global strategy in the future. I’ve pulled out an excerpt that is enlightening on what WME-IMG might have planned for the UFC and some of the incentives behind the acquisition.

Emanuel describes China as a “pretty big puzzle to solve”:

WHITESELL: We feel like their footprint in Asia — I can’t go into a lot, but essentially what they want to do with content in that part of the world given their massive mobile footprint there — is really strategic.

…China is a very important puzzle to solve, and if we solve that, then we’ve solved a pretty big puzzle for where the movie business for our clients is going and the television business is going. And sports.

Going to the original [Endeavor] premise in ’95, content is king. We have movies and television, and we have sports. So we have a solve for a bunch of those [Chinese] companies that is unique. You’ll see our foray into China that solves a bunch of their issues. They’ve made huge investments in distribution, and they’re going to need stuff to fill the pipes.

WME’s strategy can be described succinctly that “content is king.” The company has been buying entities, representing athletes and content creators, and events in order to create more content for companies to distribute.

The UFC produces 40 live events a year and has a library with tens of thousands of hours worth of content. There is also already an international market for the UFC with even more room for growth, especially in Asia, which is a key geographic region for WME. Thailand held the first MMA fight in the country less only in the last couple months.

It is important to remember that the UFC is an event-based sports business first and foremost. All the content is created around events, with twelve events a year making up the majority of the UFC’s revenue. WME-IMG knows how to create sponsorship agreements, how to monetize content, how to coordinate with content distributors, and how to cross-promote different parts of the WME company. An example given is Brad Paisley performing a free concert on Friday night before a bull-riding weekend, which enhances the event, creates a better experience for attendants, and makes sponsors happy.

One of the larger overarching themes of the article is how distribution has disrupted the business in Hollywood. Netflix, Amazon, over-the-top channels, YouTube, and more companies are distributing content to subscribers across the world. With so many different paths of distribution, content needs to be created on a level that can keep pace with demand. All the distribution companies are looking to add more original content and acquire content that will differentiate them from competitors. The value of content creators will only increase as more content is demanded by distributors and consumers.

In the latest edition the Sports Business Journal reports on the UFC sale to WME-IMG for $4 billion. The article has comments from members of the industry and outlines what the UFC means in the context of the long-term goals that Ari Emanuel and Patrick Whitesell have for WME-IMG.

The UFC has been notified that Brock Lesnar failed his USADA drug test. The first failed test was an out-of-competition sample collected on June 28th. This second test was an in-competition test, which was taken July 9th.

The UFC has long been criticized for how it treats fighters. Fighters say they are mistreated and under-compensated while the UFC says that the fighters get paid enough based on the revenue that the UFC pulls in, and if the fighters don’t like it, the UFC says they can go to one of the other promotions like Bellator.

TJ Dillashaw is coming off a unanimous decision win over Raphael Assuncao at UFC 200. On the Team Alpha Male’s Stud Show Radio program Dillashaw was very critical of the UFC signs fighters as contractors instead of workers.

On July 10threports hit the web that the UFC sold for $4 billion making it the biggest transaction in sports history. For perspective, the Los Angeles Clippers were sold for $2 billion. The only sports entity that is considered to be in the neighborhood of a $4 billion valuation is the Dallas Cowboys. What differentiates the UFC from the Cowboys is that the team in Dallas is a part of a larger organization. When one owns the UFC they nearly own the entire sport.

Below is a summary of information and insights I have onto the possible future of the new WME-IMG UFC covering the new roles of the owners, the business acumen of the investors, the marketing power of WME-IMG, what the purchase means to athletes, what global expansion will look like, what the new revenue streams are, and what the biggest risk is to the sport:

On June 25th Keith Thurman defeated Shawn Porter in a close but unanimous decision on network television. The fight was incredibly entertaining, but the most important thing for the health of the sport was that a viewer didn’t need to pay to watch. Keith Thurman understands how important it is to stay on free TV.

Pay-Per-View fighters make the most money. Boxer compensation has one of the largest spectrums in sports. Some lower pro-level fighters make a few thousand dollars to fight while some fighters can make a minimum purse amount of $100 million before PPV points. Developing a brand, a following, and one’s skills is what takes a fighter to PPV events where he hopes to cash out. However, Keith Thurman wants to stay off PPV.

In the press conference Thurman said:

“I don’t want pay-per-view. I don’t want you to pay for this entertainment. There’s too much world class athletic entertainment [available] for free. I want all of America to see [me fight].”

“I didn’t have HBO growing up. I didn’t have Showtime growing up, and if you have HBO and you have Showtime, and they make it pay-per-view, now you’ve got to come out of your pocket some more [money]. I’m not trying to gouge the American people and the American public. I want to get everybody on my side. I want everybody to have an opportunity to witness ‘One Time’ and I want boxing to come back to the forefront of network television.”

Ronda Rousey might be on her way back to the octagon soon with the new Reebok ad. In Ronda Rousey’s #PerfectNever ad there’s a reframing of losing. Combat fighters’ value is very closely tied to their record but in the case of Ronda Rousey she has only become more popular as a result of her first loss.

The commercial goes:

Perfect never gets truly tested. Perfect never gets to slience it’s critics. Perfect never gets a shot at redemption. So yeah, I’m fine with not being perfect.

We last saw Ronda Ruosey knocked out by Holly Holm at UFC 193. Going into the fight Rousey was 12-0 and seemed invincible after finishing all but one fight in the first round. When she lost the fight there she was devastated. While Rousey had planned on taking a departure from the UFC after UFC 193 the radio silence has been deafening on her interest in pursuing MMA.

Some might think that since she’s a celebrity and can make movies she doesn’t need to fight to make money anymore, therefore, she might just walk away from the sport. This ad looks like she might be coming back sooner than later.